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Saudi Military Industry Flourishes: Localization Surge to 13.6%

An image from the inaugural World Defense Show north of Riyadh. (Supplied)
An image from the inaugural World Defense Show north of Riyadh. (Supplied)
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Saudi Military Industry Flourishes: Localization Surge to 13.6%

An image from the inaugural World Defense Show north of Riyadh. (Supplied)
An image from the inaugural World Defense Show north of Riyadh. (Supplied)

The Saudi government is starting to see positive results from its efforts to boost the military, defense, and security industries. The localization rate of the sector has jumped from 4% to 13.6% by the end of 2022, a significant increase of 9.6%.
Furthermore, 477 licenses were issued for the establishment of 265 companies.
In Riyadh, Defense Minister Prince Khalid bin Salman inaugurated the World Defense Show 2024, attended by defense ministers and officials from various countries, along with specialized companies.
The exhibition is being held in the Saudi capital city for the second time after its debut in 2022, featuring the latest innovation across the defense sector.
Ahmed Al-Ohali, governor of the General Authority for Military Industries (GAMI), stressed the importance of unlimited government support to strengthen the sector.
This support aims to enhance the Kingdom’s strategic capabilities, promote the localization of national military industries, and align with the vision for the future.
Government Spending Boosts Defense Industry in Saudi Arabia
Saudi Arabia is boosting its defense and security industries with strong government support. This push aims to advance these sectors and fulfill the localization goal of 50% of government spending on military equipment and services, as outlined in the national transformation plan, “Vision 2030.”
Al-Ohali stated that the Kingdom is already seeing positive outcomes, with the localization rate increasing from 4% to 13.6% by the end of 2022. Furthermore, 477 permits and licenses were issued for 265 companies in the military industries sector, creating over 74 investment opportunities for localizing the supply chain.
The governor highlighted the sector’s expected contribution to the GDP, reaching around SAR 93.75 billion ($25 billion) by 2030. It is anticipated to generate 40,000 direct job opportunities and 60,000 indirect job opportunities in the same year.
International Partnerships
Emphasizing the World Defense Show’s significance as a crucial platform for experts and industry professionals, Al-Ohali affirmed that “the second edition of this leading international event in the defense and security industry in the Kingdom is an extension of the successes and achievements witnessed in the inaugural edition.”
“The exhibition will strategically support the nation's efforts towards achieving localization targets and provide an ideal environment for communication and interaction among participants,” added Al-Ohali.
“The aim is to enhance international partnerships in the defense and security industry, contributing to the vision of our beloved Kingdom through technology transfer and competence development support.”

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Inflation Rose to 2.3% in Europe. That Won't Stop the Central Bank from Cutting Interest Rates

A view shows the Bercy Economy and Finance Ministry as a metro operated by the Paris transport network RATP passes over the Pont de Bercy bridge in Paris, France, November 28, 2024. REUTERS/Stephanie Lecocq
A view shows the Bercy Economy and Finance Ministry as a metro operated by the Paris transport network RATP passes over the Pont de Bercy bridge in Paris, France, November 28, 2024. REUTERS/Stephanie Lecocq
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Inflation Rose to 2.3% in Europe. That Won't Stop the Central Bank from Cutting Interest Rates

A view shows the Bercy Economy and Finance Ministry as a metro operated by the Paris transport network RATP passes over the Pont de Bercy bridge in Paris, France, November 28, 2024. REUTERS/Stephanie Lecocq
A view shows the Bercy Economy and Finance Ministry as a metro operated by the Paris transport network RATP passes over the Pont de Bercy bridge in Paris, France, November 28, 2024. REUTERS/Stephanie Lecocq

Inflation in the 20 countries that use the euro currency rose in November — but that likely won’t stop the European Central Bank from cutting interest rates as the prospect of new US tariffs from the incoming Trump administration adds to the gloom over weak growth.
The European Union’s harmonized index of consumer prices stood up 2.3% in the year to November, up from 2.0% in October, the EU statistics agency Eurostat reported Friday.
Energy prices fell 1.9% from a year ago, but that was offset by price increases of 3.9% in the services sector, a broad category including haircuts, medical treatment, hotels and restaurants, and sports and entertainment, The Associated Press reported.
Inflation has come down a long way from the peak of 10.6% in October 2022 as the ECB quickly raised rates to cool off price rises. It then started cutting them in June as worries about growth came into sharper focus.
High central bank benchmark rates combat inflation by influencing borrowing costs throughout the economy. Higher rates make buying things on credit — whether a car, a house or a new factory — more expensive and thus reduce demand for goods and take pressure off prices. However, higher rates can also dampen growth.
Growth worries got new emphasis after surveys of purchasing managers compiled by S&P Global showed the eurozone economy was contracting in October. On top of that come concerns about how US trade policy under incoming President Donald Trump, including possible new tariffs, or import taxes on imported goods, might affect Europe’s export-dependent economy. Trump takes office Jan. 20.
The eurozone’s economic output is expected to grow 0.8% for all of this year and 1.3% next year, according to the European Commission’s most recent forecast.
All that has meant the discussion about the Dec. 12 ECB meeting has focused not on whether the Frankfurt-based bank’s rate council will cut rates, but by how much. Market discussion has included the possibility of a larger than usual half-point cut in the benchmark rate, currently 3.25%.
Inflation in Germany, the eurozone’s largest economy, held steady at 2.4%. That “will strengthen opposition against a 50 basis point cut,” said Carsten Brzeski, global chief of macro at ING bank, using financial jargon for a half-percentage-point cut.
The ECB sets interest rate policy for the European Union member countries that have joined the euro currency.